PT  - JOURNAL ARTICLE
AU  - Joshua Mallett
AU  - Craig McCann
TI  - Further on the Returns to Non-Traded REITs
AID  - 10.3905/jwm.2021.1.153
DP  - 2021 Oct 31
TA  - The Journal of Wealth Management
PG  - 113--127
VI  - 24
IP  - 3
4099  - https://pm-research.com/content/24/3/113.short
4100  - https://pm-research.com/content/24/3/113.full
AB  - In this article, the authors expand their prior research on 89 non-traded REITs with 51 non-traded REITs that first updated their NAVs after May 1, 2015, or came into existence after May 1, 2015, and had either had a liquidity event or updated their NAVs by December 31, 2019.They document significantly lower returns earned by investors in 140 non-traded REITs compared to the returns they would have earned in a portfolio of traded REITs. Non-traded REITs as a group underperformed traded REITs by approximately 8% annually. The dollar losses from investing in non-traded REITs instead of traded REITs exceeded $75 billion as of December 31, 2019. The underperformance did not decrease over time; non-traded REITs that broke escrow in 2015–2019 underperformed traded REITs to the same degree as earlier non-traded REITs. They show that non-traded REITs’ aggregate underperformance is observed for capital raised in every calendar quarter.Key Findings▪ Non-traded REITs continue to significantly underperform traded REITs.▪ This aggregate underperformance was $75 billion as of December 31, 2019, and is observed for capital raised in every calendar quarter.▪ Despite real estate risk and illiquidity, aggregate non-traded REITs returns approximately equal returns to short term Treasury securities.